Greenpeace lauds India court ruling on illegal coal allocations

NEW DELHI (Thomson Reuters Foundation) - Greenpeace India has lauded a landmark ruling by the country's top court to scrap 214 coal blocks given by the government to various companies after the allocations were deemed to be illegal and arbitrary.

The Supreme Court verdict is a victory for the environment over corruption in the mining industry, said Greenpeace India, urging Prime Minister Narendra Modi's government to reverse "its excessive reliance on coal power as the engine of economic growth".

"It’s a strong message from the highest court in the country to the government and industry that the laws of the land cannot be circumvented and disregarded," said Vinuta Gopal, Greenpeace India's Climate and Energy campaigner.

"The government has a stark choice — whether to develop a pro-people, pro-green economic model, or stick with corrupt, expensive, dirty energy," she added in a statement late on Wednesday.

India is desperate for power, and coal is expected to remain at the heart of its energy security for decades. Coal fuels more than two-thirds of the power generated in India, yet a third of the country's 1.2 billion people have no access to electricity.

While the government and corporations are investing in cleaner energies such as solar and wind, analysts say it is nowhere near enough to power India's industrial growth.

The graft scandal dubbed "Coalgate" came to light in 2012, after a government audit showed that allocating the resources, instead of auctioning them off, had cost the exchequer as much as $33 billion over the past two decades.

Power, steel and cement companies who were allocated blocks must now return them by the end of March, and the government will have to auction them off. Shares in some companies that invested heavily in coal mining projects sank after the ruling.

FIGHT OVER FOREST

One of the coal projects affected is the Mahan block in India's central state of Madhya Pradesh.

The project has been at the center of bitter battle between local villagers and the Mahan Coal Ltd (MCL) - jointly owned by Essar Energy Plc and the Aditya Birla-owned Hindalco Industries Ltd - which wants to mine part of the Mahan forest for coal.

Villagers, supported by Greenpeace India, oppose the project in Singrauli district, saying that it will destroy the timber, leaves and seeds of a centuries-old forest of Sal trees on which they depend for income.

MCL says only a few thousand people will be affected, and they will be compensated for lost income for as long as they live. The company has invested $3.2 billion in the project, but has not started mining yet due to a lack of official consent for villagers.

"Mining in Mahan would mean loss of livelihoods and rich biodiversity. The government should review the criteria on which coal blocks are allocated and spare the blocks in the forest areas," said Greenpeace India's Gopal.